The shadow economy beyond European public governance

Claudio Quintano and Paolo Mazzocchi ()

Economic Systems, 2013, vol. 37, issue 4, 650-670

Abstract: The purpose of this paper is to try to analyze the Shadow Economy (SE) and its determinants by means of the Structural Equation Model (SEM)-Partial Least Squares (PLS). The overall topic of the SEM-PLS approach is controversially debated in the literature. In the past decades, the focus on the SE has increased and the range in the estimated size of this phenomenon is very divergent. By examining the effects of a set of indicators, economic theory often emphasizes the need for lower taxes and less regulation, but many other factors, such as administrative quality, are frequently neglected. Policy implications are discussed. Estimates for the SE as a percentage of GDP can be calculated and European countries are clustered according to the obtained results.

Keywords: Shadow economy; Non-observed economy; Structural equation model partial least squares; European public governance (search for similar items in EconPapers)
JEL-codes: E26 O17 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:37:y:2013:i:4:p:650-670

DOI: 10.1016/j.ecosys.2013.07.005

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